Appeal success for share trading HUF - penalty under Income Tax Act set aside

The Appellate Tribunal allowed the appeal filed by the Hindu Undivided Family engaged in share trading, setting aside the penalty imposed under section 271(1)(c) of the Income Tax Act 1961 for the Assessment Year 2014-15. The Tribunal held that there was no concealment of income as the assessee had duly disclosed the exempted income, emphasizing that a penalty cannot be imposed solely based on a claim being disallowed by the Assessing Officer. Citing a Supreme Court judgment, it was established that an inaccurate claim does not amount to furnishing inaccurate particulars of income, leading to the deletion of the penalty.

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Issues involved:
The appeal against the penalty order under section 271(1)(c) of the Income Tax Act 1961 for the Assessment Year 2014-15.

Summary:
The only issue raised was the confirmation of the penalty levied under section 271(1)(c) of the Act. The assessee, a Hindu Undivided Family engaged in share trading, declared a profit on sales of shares and claimed exemption under section 10(38) of the Act. However, the Assessing Officer treated the income as business income instead of long-term capital gain, leading to penalty proceedings. The assessee contended that full disclosure was made regarding the exempted income, arguing against the imposition of the penalty.

The Appellate Tribunal noted that the income was duly disclosed by the assessee, indicating no concealment of particulars of income. It was emphasized that the penalty cannot be imposed merely due to a claim not being accepted by the Assessing Officer. Referring to a Supreme Court judgment, it was established that an inaccurate claim does not equate to furnishing inaccurate particulars of income. Consequently, the Tribunal directed the Assessing Officer to delete the penalty levied, allowing the appeal of the assessee.

In conclusion, the appeal filed by the assessee was allowed, and the penalty was set aside based on the lack of concealment or furnishing inaccurate particulars of income.

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